Business News

Oct. Factory output declined for the second straight month

CONTRACT OUTCOMES reached a second consecutive month in October, the Philippine Statistics Authority (PSA) reported on Friday.

Preliminary results from PSA’s latest Monthly Integrated Selected Industries (MISSI) survey showed that factory production, as measured by the volume of production index (VoPI), fell 1.8% year-on-year in October from a 5% decline in September. This was a reversal of growth of 1.4% last year.

On a month-over-month basis, VoPI for the manufacturing sector increased by 2.8%, a change from a 2.5% decline in September. Stripping out seasonal factors, output fell 0.4%, slower than the 3.6% contraction last month.

From January to October, VoPI growth reached 1.7%, compared to 5.4% in the same period last year.

For comparison, S&P Global’s Philippine purchasing managers’ index (PMI) for the month fell to 52.9 from 53.7 in September.

A PMI reading below 50 indicates a contraction in the manufacturing sector, while 50 indicates an expansion.

Michael L. Ricafort, chief economist at Rizal Commercial Banking Corp., said the VoPI had a slight decline due to the bad weather, which reduced production days caused by the suspension of working days.

“The gradual decline (in VoPI) was caused by the typhoons (that entered) the Philippines. There were disruptions to work in the worst hit areas. They could not work because the manufacturing and production facilities were closed,” said Mr. Ricafort on the phone.

PSA attributed the slight decline in October factory output growth to an annual growth rate of 6.8% in the beverage industry from a decline of 8%. The beverage industry segment accounts for the fifth largest weight (6.7%) of total production, after coke and refined petroleum products (7.6%).

Also contributing to the slow annual decline in VoPI in October were the production of firewood, bamboo, sugarcane, rattan articles and related products, which increased by 26.4% in October from 24.3% in the previous month, and transportation (up 6.7% from 3.2%).

All 22 industry categories reported energy utilization rates above 60% in October.

The top three industrial categories for energy consumption rates were non-electrical machinery and equipment (85.9%), other non-metallic mineral products (82.6%), and textiles (82.3%).

Mr. Ricafort said there will be an improvement in the manufacturing sector in November and throughout the year because of the Christmas season.

“There is a lot of demand at Christmas, since people have money. It is a currency used by many people. There they get their bonus, and overseas Filipino workers send money to spend on Christmas,” said Mr. Ricafort. – Charles Warren E. Laureta


Source link

Related Articles

Leave a Reply

Your email address will not be published. Required fields are marked *

Back to top button